Chell Acquisition Corp., a private company owned by ASP industry veteran Cameron Chell, chairman and CEO of Chell Group Corp. , has signed a Letter of Intent to purchase all of the outstanding shares of Canadian IT systems integrator Logicorp.

The purchase price for Logicorp will be $8.0 million, to be paid in a combination of cash and Chell Group Corp. common stock, with a performance earn-out based on EBITDA levels. Laguna Beach, Calif.-based Chell Acquisition Corp has agreed to allow Chell Group, headquartered in Toronto, to assume Chell Acquisition Corp's position in the acquisition of Logicorp, set to close August 30, 2001.

"One of the main reasons we are so keen on this space, and Logicorp in particular, is their deep knowledge of the service provider channel requirements as well as their profitable and growing business model," Chell said. "We believe we have the skills to quickly and efficiently deploy new technologies within any organization we acquire, becoming a powerful competitive advantage for us in our acquisition program."

Logicorp is a regional system integrator with the foundation and ability to deliver and grow into a North American system integrator and Information Technology services provider. It handles all aspects of IT systems integration and solutions development, including application and network integration, desktop support, hardware/software procurement, systems architecture design and consulting. Logicorp is also the second-largest reseller of Citrix software in Canada.

Logicorp had net earnings of $1 million on revenue of $35.9 million for its year ended June 30, 2000. Revenues for June 30, 2001 are anticipated to be approximately $40 million with EBITDA of $1 million and net earnings of $600,000. Chell Group Corp. would triple its revenues with acquisition of profitable system integrator

"Not only is this transaction immediately accretive but it also provides the critical mass and fundamental platform to launch additional acquisitions. We believe that significant synergies exist between Logicorp and Chell, and anticipate being able to increase the top lines, bottom lines and the margin of both Logicorp and Chell," Chell said.

Chell Group Corp. is a technology buyout firm in the business of acquiring and transforming new and existing businesses by applying new direction, management infrastructure and technology platforms. Its goal is to acquire, transform and build businesses to compete and dominate significant marketplaces, creating wealth for Chell shareholders.